Washington Life Producer Practice Exam

What right does an employee under a group insurance policy have in the event of employment termination?

1. Change the insurance carrier

2. Name a new employer as the beneficiary

3. Convert to an individual policy

4. Cancel the group policy

The correct answer is: Convert to an individual policy

An employee covered under a group insurance policy has the right to convert to an individual policy upon termination of employment. This conversion option is provided to ensure that the employee does not lose their insurance coverage due to job loss or change in employment status. The conversion process allows the individual to continue their health or life insurance coverage without needing to undergo medical underwriting or provide evidence of insurability, making it a significant benefit for individuals who might otherwise face difficulties in obtaining coverage on their own. In many group insurance plans, this right is explicitly outlined and gives former employees peace of mind knowing they can maintain coverage even after leaving their job. The individual policy will typically have different terms and possibly higher premiums compared to the group policy, but it ensures continuity of coverage.